Malaysia weighs AirAsia contingency plans, asks Malaysia Airlines, Batik Air about domestic routes

Malaysia’s government has asked Malaysia Airlines and Batik Air whether they could absorb AirAsia’s domestic market share as authorities monitor the financial health of Southeast Asia’s largest low-cost carrier, according to two sources. Discussions have intensified in recent weeks involving the finance ministry and state-linked airport operator Malaysia Airports Holdings Berhad (MAHB). The talks reflect concern about AirAsia after jet fuel costs jumped 66% in the second quarter to an average of $183 per barrel, linked to the U.S.-Israeli war on Iran. Airlines said they would only consider taking over AirAsia operations at scale if they could also assume aircraft leases, Reuters reported. AirAsia says it doesn’t comment on speculation.